Will Ghana overcome glitches in Renewable Energy sector?

Will Ghana overcome glitches in Renewable Energy sector?

The Republic of Ghana is a small South African country having landed area of 238,535 km2 and with a population of 30 million. Though it was the first sub-Saharan African country to introduce a mobile network (1992) and was one of the foremost countries in Africa to avail internet services, its power sector is lagging. It aims an ambitious dream of increasing renewable energy  use and set to accomplish a 10% penetration of nationwide power generation by 2020. Many policies have been set to achieve this goal.In reality, it is far behind the target set either for renewable energy integration in particular and power sector development in general. The country has thermal power (61%), hydro (38%) and solar (less than 1%).While Ghana has the second-highest electrification pace in sub-Saharan Africa, millions live in countryside or inaccessible communities still do not have normal access to electricity, and about one third of rural are still deprived of connection to national grid. Research and corroboration demonstrate that Ghana has overabundance of prospective assets that could be developed as renewable energy, including solar, wave, bio energy, and hydropower. Ongoing efforts from private and public sectors as well as Government policies all cohesively create more opportunities for realistic expansion on renewable energy. However, to make matters worse, the privatization of Distribution sector may increase electricity charges in immediate future as international debt is increasing at regular pace. This will again affect the renewable sector in off-putting way.

Till 2014, the electricity Generation, Transmission and Distribution were under Public sector with Governmental committed role. The country has faced acute shortage of electricity during 2014-15 due to shortage of Generation during 2014-15.During 2014,the US-Africa summit, it has been decided to tide over  the situation by signing agreement with US Government’s agency Millennium Challenge Corporation, a bilateral United States foreign aid agency. Consequently fast track projects in Generation sector started.However,it was without any planning or data analysis. It is alleged that even competitive and transparent tendering practices were also not followed.

During 2014,as many as 48 Power Purchase Agreement[PPAs] were signed with Emergency Power Producer based on the above. ‘Take or Pay ‘was one of the conditions. By the end of 2018, installed capacity of 5083MW could be achieved though peak demand touched only 2700MW, of which 2300MW are under take or pay ie.even in the absence of electricity usage Ghana has to pay the contracted electricity. The extra expense on account of this was to the tune of millions of dollars. The contract for LNG was also with take or pay condition and hence economy suffered severelly.The generators have to be paid in US dollars, created more international debt of Ghana. Due to stringent clauses of agreement, the country could not make an attempt on it at all. Ghana was advised not to change investment free ambience at any cost.

As the financial crunches increased more and more, its solutions were also thrust upon. First was to privatize Distribution sector in Ghana ie Ghana Electricity Company [ECG] and from 2019 March, the distribution fell into hands of Power Distribution Ghana Ltd [PDS],a private company. All assets of erstwhile Distribution company has been transferred to PDS.This transformation has created an increase of 60% electricity charges forced on  the common man who is always at the receiving end.

With this background, will Ghana succeed in achieving its target of introducing 10% renewable Energy by 2020?

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